Restart Volvo

After being acquired by Geely, the Swedish automaker Volvo went through a managerial shakeup. Now the engine of this auto giant was restarted.

Stephen Jacob chose to work for Geely after considering the routine business of Volkswagen and the new chapter of volvo. When he got familiar with his position, the new CEO of Volvo Automotive (hereafter Volvo) finally made up his mind and declared the new managerial structure of Volvo.

In the middle September, Jacob stated his plan in Volvo’s board conference Volvo’s current primary target is to expand the market share instead of catching up with the rivals.

The Multinational Force

Stephen Jacob removed the position of COO. The global vice presidents in charge of products development, manufacturing, purchasing and quality directly reported to Jacob. This was thought to be the first step of Jacob’s making out new managerial structure.

The structure of Chinese team of Volvo is always under heavy scrutiny. Xu Guozhen, who once worked for Ford resigned after taking his position three years ago. This made Volvo’s Chinese management team more mysterious.

In the new Volvo China’s managerial team, Shen Hui from Fiat was appointed Volvo’s senior global vice president and Chairman of China branch. He will take charge of the production and business operation of Volvo in China. Tong Zhiyuan from the Beijing Automotive Industrial Corp. was appointed CEO of Volvo China. Alexander Klose held his position as the CEO of Volvo (China) Automotive Sales Company. Meanwhile, Wang Zhaoxing was appointed vice president of Volvo China. Lars Danielson, former general manager of Volvo’s Torslanda Plant took the vice president of Volvo China, taking charge of the industrial system.

Notable is the appointment of Danielson the Swedish executive was moved to China to look after the production there, which manifested the precise attitude of Volvo to the products management system. Obviously, Geely hoped that this quality could be maintained in the Volvo autos made by China.

Li Shufu, board chairman of Geely, followed his rule of “letting people knowing business manage business”, which was represented by the appointment of Jacob and Shen Hui. Meanwhile, this management team, which can be called a “multinational force”, was given a bigger space to use their talents.

Jacob served Volkswagen as the Asian-Pacific vice president from 1997 to 2001. During this period Volkswagen went through fast increase in China and gradually got rid of the loss. Therefore, Jacob had comprehensive understanding of the Chinese market.

Jacob said that he accepted Li Shufu’s invitation because he liked Li’s “open and innovative mind and his entrepreneurship”. According to him, their first meeting happened online when he was in the USA while Li was in China. The short communication made him know Li Shufu’s style. One week later, he made a face-to-face interview with Li in Hong Kong and decided to join 14 hours later. He said that his idea completely complied with Li Shufu’s Volvo’s future lies in innovation instead of following suit.

In Li Shufu’s opinion, Volvo’s rebirth is the reincarnation of Volvo Volvo has no knockout products like Benz’s S-series and BMW’s 7-series. No leading technology, no leading place. Volvo entered the age of upgrading products from this year the development of top-class autos and the launching of the small cars with new platform, new engines, new gears and new chassis.”

It is not certain that Li Shufu’s opinion can fully represent Jacob and his team’s expectation over Volvo’s future. But it is affirmed that the new team composed of people from different countries will help Volvo go through the transition with their experiences and skills till the project of Volvo in China was put into use.

Set for Global Stability

Li Shufu once said: “We are going to see big development. The people from Volvo were too conservative and dared not do things without a 100% surety for success. But for me, 80% possibility of success is enough. The conservatives and the radicals like me should work hard together for two or three years and then things will go better.”

People from Volvo also agreed with Li’s point.

According to an insider who took part in Volvo’s global board conference in middle September, the workers in the headquarters of Volvo in Stockholm, Sweden, have changed their mindsets. Leith, former director of Volvo Museum, said: “When Volvo was just acquired by Geely, we were quite anxious. But now we feel steady and sure.” He keeps studying English every day and hopes he could go to visit China one day to see Geely in person. The thought of this veteran of Volvo represents most of Volvo’s workers, who want to know their Chinese boss’s power and future vision.

The labor union of Volvo, never erased their support to the development of Volvo when talking about mergers and acquisitions and the company’s future with Li Shufu. It is known that four people representing Volvo’s blue-collar and white-collar workers are selected into the 11-people directorate of the new Volvo.

A local auto dealer in Sweden said that he once dealt with several auto brands. Recently he sold the franchise of all brands but Volvo and planned to increase the investment in expanding the number and scale of stores. “I am just bullish on Volvo.”

According to the data from Volvo, the company sold 12.5% more units of autos in the first nine months of 2010 from a year ago. The increase in China was 53%. It proved the reasonability of Volvo’s current development strategy. In addition, Volvo accelerated the pace of launching new products and new steps. New C30 and XC60 have been introduced to enrich the category of luxury cars to meet the demand of consumers.